ABSTRACT
This chapter is a detailed film financing/investment case scenario where the author explains the process an investor goes through (one hopes) when making a decision on a larger independent project priced at $20m. Some years ago, he started working with a private investor, set to raise a considerable sum of equity from Middle Eastern sources. The investor was intrigued to learn more about how film financing and investments were structured in the international business. He asked the author – as a potential manager of the fund – to address the following question:
You are presented with five film packages, all priced at around $20 Million budgets on average. How would you go about selecting which one to fund? Be as specific as possible. If our investment company and your company Larkhall was to finance, manage and executive produce this particular film, all or in part, how would the equity be structured? What and when would our investment be returned – if ever?
Building on that source material, this chapter sets out to review, as transparently as possible, the thought process and risk management considerations made by an investor/executive when considering project finance and the steps towards (or not) an investment commitment. The analysis also helps the producer (and student) to understand the level of information and creative material required in a film or TV package in order for a decision to be reached by a financier/investor.